How AI is creating a retail revolution
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With technology supporting cutting-edge shopping experiences, such as in-store personalized adverts and chatbots, augmented reality displays, and real-time price adjustments, our way of shopping is here to change. The implementation of artificial intelligence (AI) plays a fundamental role in driving the revolution of the retail industry.
According to McKinsey, customers are willing to spend more in return for personalized experiences. Furthermore, when shelf-level advertising is done in an informative and entertaining manner, customers are also more receptive to it. In order to meet these high expectations, physical retailers need to better understand their customers. This is where AI comes in, allowing retailers to harness the full value and provide multiple solutions.
With AI technology in-store, retailers can unlock a world of new customer experience, for example, autonomous shopping. By analyzing in-store data, retail stores are empowered with the necessary information to deliver dynamic pricing and real-time promotions. Furthermore, AI helps to answer big questions including what shoppers are looking at, what they are buying, and what they will buy next. These insights benefit both sides as it’s crucial for consumers to have a personalized buying experience.
AI also enables retailers to understand their customers by breaking down the barriers between different channels to take an omnichannel approach, allowing them to deploy technologies such as conversational AI to both in-store and online experiences.
Not only on the shop floor, AI also plays a key role in the backstage to improve the supply chain, anything from forecasting to routing optimization. By having a ‘smart warehouse’, retailers are able to keep track of inventory, link stock levels to real-time purchase trends, and boost efficiency in the business.
Empowering retailers with AI
The technology that will light the spark for this change is available now. It exists in the cameras already in retail stores combined with the power of AI and edge computing, which helps bring data storage closer to the source to enable quicker processing and achieve faster results. Retailers are already pioneering this technology, with powerful edge AI servers in stores which are helping to deliver the future of self-checkout. The servers are connected to high-resolution cameras in-store. An AI application monitors shoppers as they check out, running on edge servers which work in real-time.
When the edge servers spot an error, which could be anything from non-scans to ‘product switching’ where shoppers swap stickers to scan expensive items as cheaper ones, the system reacts immediately. If a customer triggers an error, they’re given a real-time ‘nudge’ in the form of a five-second video displayed on the point-of-sale terminal. If they don’t respond, a shop assistant is notified.
This is made possible by servers which can process inputs from 20 cameras at once in real time. The cameras help retailers deal with theft, but also keep track of inventory – and the technology has huge potential right across the front and back-end of retail businesses. By connecting edge AI to in-store cameras, retailers may soon be able to check that deliveries match exactly what was ordered. When customers ‘click and buy’, AI cameras could ensure they leave with the right goods. Such systems make it easier to track stock and understand demand.
Harnessing AI and edge computing offers potential far beyond simply dealing with problems such as theft. It can deliver customer insights that will transform the whole business, empowering retailers with the knowledge they need to improve store planning and place goods to drive increased sales.
Data-driven productivity
Just about every store already has cameras, but the footage being captured is barely being used – it’s used as evidence when an incident occurs, but for little else. An edge system, combined with the power of AI, can rapidly turn this footage into tangible business value. Simply by plugging a video feed into an edge server GPU, the system can deliver the information required for valuable shopper behavior analytics, allowing retailers to deliver instant personalized advertising, real-time promotions, and dynamic pricing. All of these can increase purchases and drive revenue.
AI can also be highly powerful in helping retailers ‘join the dots’ and build an omnichannel approach. This comes by linking data from ecommerce with retail data, helping to build a ‘Customer 360’ view to deliver improved experiences. When it comes to customer service, AI chatbots will become increasingly important, both in-store and out, helping to break down the barriers between offline retail and ecommerce. These interactions will continue to paint a full customer picture.
Analysis of employee behavior can also help business leaders drive productivity and optimize staff schedules, while the cameras can also help protect employees from threats and ensure stores aren’t overcrowded. Edge computing works in synergy with AI here, offering retailers a way to process this information at the point of interaction, delivering information where it’s needed, fast.
Analyzing the supply chain
This powerful combination of AI and edge computing also has applications well beyond the shop floor. Analytics from warehouses and stock rooms can allow retailers to be more efficient about ordering products, restocking shelves, and planning logistics effectively.
The more this data is shared between different parts of the business, the more valuable it becomes. If real-time stock levels are linked to shop floor data about purchasing trends, these insights can help the whole business to become more efficient and more streamlined. For instance, retailers can use data to understand the average amount of customers who enter the store at different times throughout the year, and stock their floors accordingly to match this demand. This is a key differentiator for successful retailers in the lead up to busy periods, such as Christmas.
In warehousing and supply chain, AI can help with everything from optimizing routing and cold chain to inventory and warehouse management. AI analytics can ensure that products arrive faster and fresher, and empower business leaders with the ability to anticipate problems, while also reducing waste.
The retail AI revolution
The winners and losers in the retail sector will depend on who has taken advantage of real-time data and analytics. Forward-thinking businesses will be able to deliver the desired personalised experiences by leveraging AI and edge technology to harness data. On top of improving day-to-day business operations and efficiency, data help to unlock insights that lead to entirely new revenue streams.
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